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Volume 2017 - Number 48

December 15, 2017

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Investors Seem Willing to Absorb Agency MBS When The Fed Finally Begins Paring its Massive Portfolio

The agency MBS market continued to grow at a measured pace during the third quarter of 2017, with several key investor groups showing interest in the market, according to a new Inside MBS & ABS analysis.

Janet Yellen’s Last Hurrah: A Final Rate Hike, And Don’t Expect More Info on the Great Unwind

The three most notable aspects of Janet Yellenís final press conference as the chair of the Federal Re-serve were the expected comments in support of the central bankís 25 basis point rate increase, positive economic expectations of pending tax reform efforts, and confirmation the Fed is unlikely to provide much information about its balance sheet reduction going forward.

Non-Agency Single-Family Rental Securitization Volume Peaked in 2015, Analysts Don’t See a Rebound Coming

Issuance of single-family rental securities started in 2013 and hit $7.17 billion in 2015, according to Inside MBS & ABS. Industry analysts suggest that the relative boom in issuance is over due to a number of factors, including activity by the government-sponsored enterprises.

SEC Said to Have Given Tacit Approval of Sale Treatment For CMBS Issuers Selling Risk Retention to Third Parties

Participants in the commercial MBS market appear to have some certainty regarding the use of third-party purchasers to meet risk-retention requirements. The Securities and Exchange Commission seems to have helped resolve concerns about the accounting treatment for such deals, though a formal statement hasnít been issued.

Freddie Focuses on Affordable Housing In its Inaugural Single-Family Rental Deal

After exploring the single-family rental market for the better half of a year, Freddie Mac an-nounced a $161 million pilot deal with CoreVest American Finance Lender. The government-sponsored enterprise said its foray into the market is aimed at providing affordable housing for low-income and working families.

GNMA’s Latest Effort to Rein in VA Lenders Augurs Additional Policy Changes in the Future, Analysts Say

New pooling restrictions announced last week by Ginnie Mae to curb churning and prepayment speed spikes are likely a precursor to future changes in pooling and refinancing policies at Ginnie and the Department of Veterans Affairs, according to analysts.

Daily Trading Volume in Agency MBS Rises Again; Overseas Investors Not Likely to Shy Away from Fannie/Freddie Bonds

The average daily trading volume in agency MBS inched up to $223.6 billion in November, the second best showing of the year, according to figures compiled by the Securities Industry and Finan-cial Markets Association. The only other month that was stronger was January at $229.8 billion.

FHLBank of Seattle Lost Appeal to Sue Moody’s for Risky MBS Purchase

The Federal Home Loan Bank of Seattle lost an appeal in an MBS case against Barclays Capital this week in which it claimed the investment banker made false statements or left out certain facts about the securities it sold in 2008. But the Court of Appeals of Washington State ruled that the FHLBank was fully aware of what it was buying at the time.

MBS & ABS Issuance at a Glance

One page of issuance data.

Poll

With originations expected to drop in 2018, will your shop turn to non-QM/non-prime mortgage products as a way to bolster volumes?

Yes, definitely. We’re planning a launch.

33%

No. It’s still difficult compliance/regulatory-wise.

20%

Maybe. It’s under consideration.

33%

Not now. But things could change as 2018 progresses.

13%